Rosolowski v. Guthy-Renker LLC (Cal. Ct. App. Oct. 29, 2014)

Facts:

  • Plaintiffs, a putative class, brought this action against Guthy-Renker LLC ("Guthy") for allegedly sending them unsolicited commercial email advertisements in violation of California's Business and Professions Code.
  • Specifically, plaintiffs claimed that the "senders" were not names, OR registered fictitious business names, of existing firms AND were not traceable to defendant via a "WHOIS" search.
  • Further, plaintiffs claimed that the applicable "subject" lines indicated that the recipient would be entitled to a free gift, without also mentioning that the gift was contingent upon making a purchase.
  • Defendant "demurred," arguing that plaintiffs' claims under the California Code should be dismissed because they are preempted by the Federal CAN-SPAM Act.  
  • Defendant argued that the CAN-SPAM Act preempts claims under the State statute unless the applicable header and subject lines are materially false or misleading. Here, defendant claimed that: 1) the "from" and "subject lines" contained famous brand names that were identified with defendant; 2) the body of the email included identifying information; and 3) the subject lines accurately referred to a free gift.  

California Business and Professions Code § 17529.5 (in pertinent part, emphasis added):

"It is unlawful for any person or entity to advertise in a commercial email advertisement either sent from California or sent to a California electronic mail address under any of the following circumstances: ... (2) The email advertisement contains or is accompanied by falsified, misrepresented, or forged header information ...; or (3) The email advertisement has a subject line that a person knows would be likely to mislead a recipient, acting reasonably under the circumstances, about a material fact regarding the contents or subject matter of the message."

  • The trial court ruled in favor of defendant and sustained the demurrer.  
  • The court pointed out that the claims might escape federal preemption if the misrepresentation in question is "material."
  • Although the "sender" in this case did not identify defendant, it did use names of the subject advertiser's various products.  Further, the body of the email elaborates on the free gift offer – identifying the conditions under which a recipient may obtain the free gift.
  • Here, the court concluded that "a reasonable sender would not have reason to believe that commercial missives like these were likely to deceive a recipient, acting reasonably under the circumstances, about a material fact regarding the contents or subject matter of the message."
  • Plaintiffs appealed.

Court of Appeal:

  • According to the Court, the goal of the CAN-SPAM Act is to achieve a regulatory framework that is consistent nationwide.
  • The Court reviewed various relevant case law, specifically the decision in Kleffman v. Vonage Holdings Corp. 49 Cal. 4th 334, 345 (2010), which held that use of a domain name in a single email that "does not make clear the identity of either the sender or the merchant-advertiser on whose behalf the email advertisement is sent" is not prohibited under the California statute.
  • The Court further pointed out that even though the domain names were allegedly untraceable, the identity of the sender was easily ascertainable from the body of the email messages.
  • The Court took a self-characterized "commonsense" approach to the reading of the statute and concluded that "a header line does not misrepresent the identity of the sender merely because it does not identify the official name of the entity which sent the email, or merely because it does not identify an entity whose domain name is traceable via a database such as WHOIS, provided the sender's identity is readily ascertainable from the body of email, as was the case here."
  • The Court of Appeal affirmed the lower court's decision, concluding that the subject lines were not likely to mislead a recipient acting reasonably under the circumstances about a material fact regarding the contents or subject matter of the message.

Take Away:

  • Because the Court concluded that plaintiffs failed to prove a violation of the California statute, the court found it unnecessary to address defendant's argument that CAN-SPAM preempted the claims.
  • Interestingly enough, plaintiff Rosolowski had brought another putative class action against separate defendants, People Media, Inc. and People Media LLC, alleging similar claims.  The California Court of Appeal affirmed the lower court's dismissal there as well, holding similarly that, "a header line in a commercial email advertisement does not misrepresent the identity of the sender merely because it does not identify the official name of the entity which sent the mail, or merely because it does not identify an entity whose domain name is traceable from an online database, provided the sender's identity is readily ascertainable from the body of the email, as was the case here."
  • This latter decision was not published in California's official reports.
  • These California Court of Appeal decisions provide greater clarity – and protection – to email marketers and reinforce the notion that the text of the email messages themselves cannot be disregarded in evaluating their propriety under California State law.
  • Please note that this decision is limited to California State law only and, as such, is at best persuasive authority in other jurisdictions.

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